For most recording label projects; the producer can even earn royalties (depending on agreement). This is a percent of the entire album sales. How much money is involved varies entirely on the producer background and experience, see some simple assumptions below:
Producer royalty for each record sold: $0.10
Producer advance: $1000
Assuming the entire album sells 50,000 copies
The total royalties would be: 50,000 x $0.10 = $5000
Since the producer already received $1000 as the advance then the balance would be $4000.
If the album royalties total would still below $1000, then the balance is negative. The producer won’t be receiving any royalties until the total royalties earned would exceed the advance.
Hotshot producers can command higher % royalty rates (5% or even more). If the album sold very well, the advance is easily recouped.
A Beginning Producer
Things are very different for beginning producers. It might be possible that the record producer won’t be receiving any royalties at all except for a one-time payment to produce the recordings.
This one-time payment can be very low as it depends entirely on the budget of the artist or independent labels. Bear in mind that big recording labels would not likely hire a beginner producer. They prefer to hire successful/experienced record producer with proven track record. This can be quite expensive but major labels can afford.
If you are a new producer, then I would suggest that the record producer fee should cover the basic cost as follows:
Beginner record producer fee = (Total studio rental cost + services fee)
This would be an advantage for a record producer that owns a recording studio because the rental cost factor would be very low (except for the electricity cost, etc). Thus the resulting producer fee is more affordable and attractive to prospective clients.
Example:
Supposing you have a recording studio and you are a new producer excited to bring projects to a reality. You want to help artist transform their songs into professional recordings. The services fee and studio rental fee per song based on your assumption goes well around $100. Therefore the record producer fee per song (flat, one-time payment and no royalties involved) would be: $100.
If you are hired to record the entire album of 12 songs, you will be receiving $1200 as a payment for the project. Bear in mind that this will be entirely up to you in deciding the service charge. Make sure that your client is happy with your rates.
Take note that as a producer, you would still be hiring a mixing engineer or mastering engineer as well other crews needed. This is assuming you won’t be mixing or mastering the projects yourself or does not have enough manpower to complete the job. Make sure you factor this cost when deciding how much you can charge.
Content last updated on July 28, 2012